Key performance indicators (KPI) have been used by a variety of industries in China as a yardstick to assess employees' performance. But improper use of KPI can undermine employees' initiative and creativity, says an article in China Youth Daily. Excerpts:

The use of KPI to assess employees' performance has put many people in a difficult situation. School teachers, for instance, although being reluctant to push students to hanker for high scores in exams are forced to do so because schools generally use students' examination results and ranking as KPI for teachers. Even people employed in the creative industry such as designers have to secure their output because their KPI determines their efficiency.

For a long time, Chinese employers, for lack of a "proper" criterion, had evaluated employees' performance on a subjective basis. But the successful application of KPI in the West made them adopt the method.

But the introduction of KPI to China by managers and employers has to a great extent made them lose sight of the fundamental function of advancing toward their strategic goals. Chinese employers use key performance indicators, generally as simplified quantitative indicators, to determine the performance of their employees.

But by relying on the key performance indicators, employers can easily neglect the management loopholes, making KPI play a role similar to that of GDP in measuring achievement by statistics.

Indeed by doing so, employers can get some immediate results such as higher work efficiency but at the same time they compromise their long-term interests by disorientating employees and killing their passion and spirit to confront challenges. As a result, employees just pursue output and a good-looking score sheet. This is a lesson drawn from the experiences of electronics giant Sony that introduced the KPI system in the 1990s to manage its research and development team, and this is a lesson worth paying attention to.